ashi12
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Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2014, the following accounts were included in stockholders' equity.

Preferred Stock, 150,000 shares $3,000,000
Common Stock, 2,000,000 shares 10,000,000
Paid-in Capital in Excess of Par Preferred Stock 200,000
Paid-in Capital in Excess of Par Common Stock 27,000,000
Retained Earnings 4,500,000
The following transactions affected stockholders' equity during 2015.

Jan. 1 30,000 shares of preferred stock issued at $22 per share.
Feb. 1 50,000 shares of common stock issued at $20 per share.
June 1 2-for-1 stock split (par value reduced to $2.50).
July 1 30,000 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method.
Sept. 1 510,000 shares of treasury stock reissued at $11 per share.
Dec. 31 The preferred dividend is declared, and a common dividend of 50 per share is declared.
Dec. 31 Net income is $2,100,000.
Prepare the stockholders' equity section for Hatch Company at December 31, 2015.



Can anyone please tell me how the value of retained earnings for this question is 200,000
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ashi12
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Name:  28598B98-C972-4A5D-BA1A-04E60C54D934.jpeg
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Size:  116.7 KB This is the solution for question but how did they calculate the value of retained earnings
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